We are proud to release the third case in our ongoing research project studying technology-enabled transparency policies around the world. We have chosen to focus on public procurement transparency policies for our first set of cases. You can read our previous reports on Slovakia and the Philippines here.Sydney City Hall. Photo credit: Wikimedia Commons

Introduction

In recent years there have been two major steps forward in public procurement and disclosure in Sydney, Australia. First, e-tendering portals have been widely adopted which have lowered the practical barriers to the collection and dissemination of procurement information. Second, the legal framework surrounding public access to government information in New South Wales was updated in 2010 with the Government Information (Public Access) Act (GIPA). To investigate the impacts of these reforms we conducted interviews with local procurement experts with relevant experience. We also undertook a small-scale data scraping and analysis pilot project to illustrate some of the difficulties of using Sydney procurement data as it is disclosed.

These conversations have provided us with a detailed picture of procurement disclosure and data use in municipal New South Wales, and in Sydney in particular. A few findings have become clear:

These two reforms provide the foundation for a robust and modern procurement disclosure regime. GIPA provides a mandate to make information public by default, which is an important step toward real transparency. At the same time, the use of e-tendering provides the means to easily capture and manage relevant contracting data in digital formats that facilitate aggregation and analysis. At the national level these trends have led to the default disclosure of bulk procurement data through the country’s many open data portals.

The joint promise of ICT facilitated data collection and dissemination and default disclosure has not been realized in Sydney, with these two reforms operating largely in isolation from each other. This expansive disclosure regime has not been applied to publicly releasing exports of bulk data captured and managed by Sydney’s e-tendering platform.

Essentially all disclosure in Sydney comes in the form of PDFs made available on the city website. There is a wealth of valuable information; the amount of disclosure is the highest we have observed in our three case studies. But because this information is not released in machine-readable bulk formats, public data use is unnecessarily limited.

Pre-award tendering and post-award contract management are governed by separate authorities under the city council. The result is a lack of continuity in procurement monitoring and the absence of a robust post award disclosure regime. Some information is made available in council meetings and annual reports, but there is no systematic process of contract management disclosure that would facilitate public oversight.

We found evidence of little, if any, public engagement with procurement data. This may be the result of procurement’s low public salience in Sydney, or of the barriers that exist to using the data. In either case, greater public and civil society engagement with municipal procurement is desirable as an outside check on malfeasance and inefficacy.

The law

Municipal procurement in Australia is governed by state law that may vary between states. In New South Wales, municipal government procurement policies are dictated by the New South Wales Consolidated Acts, Local Government Act 1993 (LGA). The Rulemaking in Local Government Tendering Regulation, passed in 1999 and amended in 2008, manages the implementation of Section 55 (Tendering) of the LGA. This act, and the corresponding regulation, dictates a 150,000 AUD tendering threshold, above which all local council contracting must take place through open tendering procedures. The only explicit transparency requirement within these regulations is that all requests for tenders (be they open, selective or restricted), be widely publicized in “relevant newspapers.” These publications must include: “(a) a brief description of the kind of work, goods, facilities, services or property concerned, and (b) the name of a person to whom requests for information concerning the proposed contracts may be addressed and how the person can be contacted, and (c) the deadline for submitting applications.” In recent years, this solicitation is done primarily through e-tendering portals.

More generally, a robust right to information regime governs access to government documents in Australia. A federal Freedom of Information Act was passed in 1982, and in 1989 New South Wales followed suit. Like other FOI laws, these empowered citizens to query for government documents and information, albeit with fairly standard exceptions. In 2010, New South Wales replaced its Freedom of Information Act with GIPA. In contrast to the FOI act, GIPA stresses the importance of proactive disclosure of government records, and reserves formal request procedures as recourse of last resort.

According to Phill Scott, a contracts manager at Local Government Procurement in Sydney, “In the procurement side, what the state government has tried to do [with GIPA] is to pre-empt a lot of those inquiries by requiring government entities in their annual reports to disclose the number of contracts that they have entered into during the past 12 month period that have exceeded a particular dollar value.” Furthermore, this annual report “needs to list the actual name of the contractor and the type of goods or services that have been provided and the value of that particular contract.” (Phill Scott 15:00)

Archon Fung notes that this change from “information on demand” to “information on tap” is a key component to meeting the information accessibility demands of democratic transparency. He further notes that information “should be provided in ways that take advantage of modern information and communication technologies — available in digital, downloadable, and ‘mashable’ formats.” (Fung, Infotopia, p 192.) GIPA represents a substantive step in favor of on-demand information, but unfortunately does not set clear disclosure requirements that mandate modern machine readable formats whenever possible.

Procurement process

Councils in New South Wales use a semi-centralized procurement system. Generally there is a core team of procurement experts who look after high-value or high-risk procurements and set up panels of pre-approved suppliers. According to Mr. Scott, this team acts “as a central repository of knowledge and experience and many of the day-to-day purchases are carried out in a decentralized function by staff out in the various outposts in accordance with either a panel arrangement that has been set up by that central team or in accordance with some policies and guidelines that that central team may have put in place.” (13:00)

Anthony Manuatu, a member of the centralized procurement team for the City of Sydney stressed the extensive training on proper tendering and procurement procedures that the team conducts with council members and staff at multiple stages. All city officials engaged in tendering are briefed on these procedures for maintaining probity during the staff onboarding process, at the time the evaluation panel is convened and during the tendering process. (Manuatu 25:45)

As part of their interaction with the centralized procurement team, panel members are required to declare their pecuniary and non-pecuniary interests (27:00). However, there appears to be very little verification of these claims. According to Mr. Manuatu, because of resource constraints “for those who try and abuse the system, it is very hard to identify them. If they lie on their form, we are not going to chase them down and do checks on every panel member.” (28:00)

According to the Local Government Act of 1993, these interests must be disclosed to the general manager and tabled during council meetings. Additional disclosures occur at the start of each meeting as necessary. These disclosures are made available as PDFs as part of the business papers of each meeting, but do not appear to be available in a comprehensive or centralized repository. This is the first of a recurring theme in Sydney’s disclosure: A well intended policy that mandates extensive disclosure does not truly facilitate transparency because of the manner in which information is released. The decentralized and PDF-bound nature of disclosure creates a practical barrier to public scrutiny. As a result, transgressions, should they come to light, are exposed by whistleblowers, as was the case in the most notable procurement scandal in recent memory in New South Wales, Operation Jarek.

Once tenders are submitted, an evaluation team is established within the council evaluates the tenders and presents a formal report to the elected councilors. Mr. Scott noted that, “Whilst the full content of the report may not be made public, the actual recommendation is made in a public forum at a public meeting of the council at which the public and the press are able to attend … It is a reasonably open process.” (Scott 11:15)

Procurement and contract management are handled by two separate bureaucratic concerns in Sydney. The procurement process is handled by an evaluation committee within the city council, under the oversight of a tendering officer, like Mr. Manuatu. After a contract is awarded, according to Mr. Manuatu:

We hand [the contract] over to the project manager, and they will be the main point of contact. The intention is to stick to the schedule, the agreed price, and all of those milestones. But things change … Normally we allow for a contingency within our contracts … Up to a certain value a variation can be approved by a director who reports to the CEO (of procurement), I think it is a certain percentage of the contract price. And anything over that, any major variation, has to go back to the council. (7:15)

Because the pre- and post-award procurement process is managed by different authorities, tracking and disclosing contract variation appears to be a comparatively weak point in the Sydney procurement process. There is significantly more public information available about the tendering process than there is about contract management after the award. According to Mr. Scott:

Variations are accounted for in the budget … More significant variations need to be approved by a director in the council, and certainly any significant variations would be expected to be reported to the councilors by means of, say, a monthly report [… which would] detail how the variations came about, what caused them and what is the value of the variations. That would not normally be discussed at the full public meeting unless it was particularly significant and some of the councilors wanted to table that for discussion in the open council meeting. Other than that, it would only be through that annual report and the disclosing of the contract value, that would be the other way that variations would become known. But they might not be shown in the annual report as specific variations individually, they might simply be added into the value of the contract. That would be the more likely way it would be shown. (28:30)

The post-award contract management regime can best be described as an internal oversight mechanism for maintaining probity, and ensuring that the council has control over how contracts are carried out. It is not, however, much of a transparency regime capable of enabling much public oversight of how contracts are managed.

More formalized contract modification disclosure would allow external parties to track specific contractors that consistently do not meet deadlines or go over budget. Default publishing of contracts and contract variation notices, as is done in Slovakia, would provide additional transparency to help ensure post-award probity. Mr. Manuatu did add that a new interpretation of GIPA mandates the proactive disclosure of all contracts above 5,000,000 AUD (10:00). This is a positive step, and it would be worth extending it to all contracts above the tendering threshold.

Information availability

In recent years Sydney has moved to using a comprehensive e-tendering platform, Tenderlink. However, despite the successful integration of ICT in internal tendering processes, Tenderlink has not been used to facilitate structured tech-savvy disclosure practices.

Above the tendering threshold, the city publishes a list of tenders currently submitted with the City of Sydney. According to Mr. Scott, this serves two purposes: “So the public can see how much competition there was, but also so that tenderers can make sure that their submission has been received and acknowledged.” (Scott 22:45). Disclosing the names and number of bidders online is relatively rare in jurisdictions we at Sunlight have looked at, and can prove to be an important source for detecting malfeasance. For example, in the Philippines we found that it was not uncommon for firms to collude prior to submitting bids, in order to provide the appearance of competition where there was none. Disclosing bidders can enable outside observers to note suspicious patterns of co-bidding that might indicate such behavior.

Unfortunately, the promise of this disclosure is largely unmet due to the manner in which information is made available. Bidders for each tender are listed on a static webpage in inconsistently structured HTML. The earliest notification available is from March 6, 2012, and there does not appear to be an archive of these submissions. As a result, anyone interested in collecting a comprehensive set of this data would need to invest resources in routinely scraping the page to capture tender submissions before they are removed.

Steve Schmid, general manager of the Open Technology Foundation, argued that procurement data is “an area which is a candidate for being released on the open data platforms [because] that is the one way we can ensure that citizens can ensure transparency and accountability of government spending.” (33:30) Indeed, at the national level the data is already accessible in just this manner. The Australian central government uses an e-procurement portal, AusTender, as a central repository for all tendering activity. This platform has enabled bulk, machine-readable contract award data to be directly exported from AusTender, and released as full, historical datasets on the country’s various open data portals.

The City of Sydney uses a similar e-tendering service, Tenderlink, which our interviewees noted has been “brilliantly efficient” (Scott 30:00), and has led to a dramatic increase in the number of responses to posted tenders or expressions of interest (Manuatu 13:00). As with AusTender, the use of Tenderlink has made it much easier to capture and track relevant information related to procurement. Mr. Manuatu noted that while the council tracks relevant information about tenders to run metrics like average number of responses per tender, they “don’t publish that year to year reporting externally.” (13:00)

Instead, the City of Sydney only discloses information about winning bids in the form of “disclosure of contract” notices, posted as PDFs on the council website (e.g. this). These notices typically include the winning bidder, contract date and duration, the estimated value of the contract, the method of tendering used (e.g. selective, open etc.) and the selection criteria on which the submitted tenders were evaluated. Most of this is fairly standard practice for contract award notices, although the selection criteria provided tends to be more complete and detailed than what we have seen provided in other places.

Releasing PDFs is poor disclosure practice

In Sydney, the form of procurement disclosure consistently limits its function. The lack of bulk, machine-readable data about these tenders is a significant barrier to public scrutiny and use. Despite the fact that similar AusTender data is made available in bulk form by the national government, both Mr. Scott and Mr. Manuatu cited similar reservations to explain the city’s insistence on releasing procurement information only in PDF form.

I wouldn’t picture them making them available in word or some other file format for the simple reason that there is always a concern about somebody taking some information and perhaps altering it in some way and distributing it, and the results that might come from that. They are always cautious about the potential for someone to change the original information. That is why I think it would only be available in PDF. (Scott 18:00-19:00)

Normally it is PDFs because we don’t want anyone to be able to change what we publish and normally PDFs are quite a secure format. So I think most of our documents are PDFs for that reason – that information can’t be changed. (Manuatu 11:05)

Unfortunately, this all too common attitude limits what the public is able to do with disclosed information, while providing little — if any — meaningful security. The PDFs of Disclosure of Contract notices are released unsigned and un-password protected. The result is that the only barrier to changing the information in them is the $100+ price tag on an Adobe Acrobat Pro license.

At a recent Berkman Center Luncheon, Dr. Nicolas Gruen, former chairman of Australia’s Government 2.0 taskforce, highlighted a pertinent example of institutional reservation over releasing information. He noted that when considering releasing transit data, initially the Massachusetts Bay Transportation Authority “worried, as organizations do: How will people use this data? Will they misuse the data? How will it be made available to people?” (26:30) Dr. Gruen argued that “they didn’t need to worry,” and that often this concern about how public data will be used “is a problem that doesn’t need solving. You just need to relax and take it easy and it solves itself.” (27:00) We think that releasing information from the disclosure of contract notices – information that is already public – in bulk form is in the same category as Dr. Gruen’s example. Given that the council would still control the authoritative version of the document in their Tenderlink system, we must ask: To what end would someone attempt to nefariously alter a disclosure of contract form? And does that remote possibility justify keeping useful public information locked in difficult to use formats? Releasing information in PDFs to prevent people from manipulating the information contained within is a (non-)solution to a non-problem.

If the council were to release bulk, machine-readable data about tenders, members of the public could engage in oversight practices similar to those the council is capable of performing internally. Sydney should follow the lead of the national government and release this information in usable forms.

Public engagement

During the course of this study, we have been unable to find representatives of the civil society that are engaged in local procurement monitoring in Sydney. It has seemed as though public procurement is not a locus of significant interest for the Open Government or Open Data communities in Australia at the sub-national level. Mr. Schmid, who is involved in Open Source and Open Data advocacy, confirmed that “Open Data is completely separate from procurement” in Australia. (3:30)

When asked if there were local watchdogs or civil society organizations that engage directly with procurement disclosures in New South Wales, Mr. Scott responded:

No I don’t believe so, not on the procurement side. There are certainly interest groups around the state, but they are often at a lower level, if you like, they are more aligned to a particular council. For example, in the area where I live the local council has come under some increased review of late, because of some decisions that they made about redevelopment of particular localities. As a result of that there are a couple of activist groups that have been formed, and they are monitoring the council with regard to the local environment plan etc. But on the procurement front, I can’t say that I have seen any group that has been particularly interested in procurement per se. (24:00)

Mr. Scott explained that procurement officials think of the general public as the audience for posted procurement notices, but expect a low level of engagement from those not directly affected. These notices, he added, are “of particular interest to the other tenderers plus others in the marketplace.” (23:00) Additionally, journalists regularly attend the monthly council meetings and “are certainly interested in knowing what expenditure takes place,” but “procurement in its own light is not usually what is brought up, but what might come up from time to time is the way that a particular contract is carried out.” (26:00)

The procurement office, according to Mr. Manuatu, receives the occasional phone call about a data request, and he directs them to the public information on the website. He summarized his engagement with the public, “We do debriefs for all our unsuccessfuls, if they request it. We try to educate people when they come and speak to us … Most of our phone calls are from people who have put in and they want to know who else has put in, and if they are unsuccessful, who won.” (15:50)

There is, however, some hope for increased civil sector engagement in local data issues – which would likely include procurement. Mr. Schmid, speaking of the Open Technology Foundation’s future priorities noted, “Local government data, I believe, is the goal in the holistic government and open data, because a lot of it is about important information about roads and conditions of parks and a whole disparate group of datasets. Local governments in Australia need their own open data platform and OTF is working with them to develop them.” (37:00)

It is difficult to account for this lack of direct engagement with procurement. One possible explanation is that there is a general consensus that procurement inefficiency or misconduct is rare and, in the absence of high-profile scandal, procurement is just not a highly salient issue. Another potential contributing factor that cannot be dismissed is that the barriers to use of procurement data created by poor disclosure act as a disincentive to engagements. In the cases we have examined, the public was most engaged with procurement data the in Slovakia – where an existing, well-resourced civil society group, TI Slovakia, made bulk data easily accessible through a portal designed to facilitate public use.

Our look at the data

To learn more about the difficulty of using Sydney’s procurement data as it is disclosed, we undertook a brief pilot project to scrape the data disclosed on the city’s website. This clarified the barriers to use that exist inherently in Sydney’s procurement disclosure regime.

We looked at the 30 requests for expressions of interest (EOIs), 40 tenders from the City of Sydney as well as the two tenders from the Southern Sydney Regional Organization of Councils (SSROC) that are currently listed as submitted tenders before the city. We found that the median EOI received 15.5 responses, although the mean is more than 42 responses. This indicates the distribution of responses to expression is highly skewed, with a few receiving a great deal of attention and most receiving much less. The distribution of responses to tenders is much less skewed. The average number of responses is 4.875, while the median tender received 3.5 responses. SSROCs had a 3.5 response mean and median, but the sample was too small to infer much from this.

We scraped data from 87 contract notices going back to the middle of 2012. Earlier than that a different disclosure of contract form was used, which would require writing a separate PDF parser. Inconsistent disclosure formats are a persistent problem in trying to scrape publically available data that is not made usable in machine-readable formats. Of the contract disclosures in our pilot dataset, 60 of them mention specific estimated amounts payable to the contractor under the contract; the rest are at the “Schedule of Rates.” The largest contract during this period was a three-year contract granted to Citywide Service Solutions Pty Ltd. for parks and open space maintenance with an estimated value of 26,114,831.65 AUD. The median estimated contract value for this period was 499,400 AUD.

The summary statistics we have presented are simplistic, and present only the beginning of the type of knowledge that could be gained if bulk data were available. Even so, without bulk data finding these values would require reading through and hand tabulating values for each contract disclosure. As the volume of tenders or the scale of the analysis increases, such a process becomes increasingly untenable.

Other than the problems which result from any use of PDFs, the single biggest issue with Sydney’s disclosure is that bidders are only listed on the site for tenders that are currently open before the city. The lack of any apparent historical source for who bid on each tender means that it is not possible to create a dataset measuring competition, one measuring outcomes and then linking the two together. Instead, one must consistently build the bidder/competition dataset over time, and then wait for those open tenders to close and appear as contract disclosures. Because of the scope of our pilot scraping project, we were not able to gather outcome data for any of the tenders in our bidding data, or vice versa, bidding data about any of the outcomes in our contract disclosure data. This disconnect between access to historical data for bidders and contracts presents a serious issue for public data-enabled oversight of procurement in Sydney. A more comprehensive dataset would allow us to report the relationship between the number of bidders (a proxy for the level of competition) and the final value of the contract. Similarly, a more complete dataset would allow for comparisons of bidding behavior between firms, which could highlight evidence of collusion.

Conclusion

The city of Sydney, like the Australian government more generally, makes an extensive amount of information available online by default. The city’s embrace of Open Government and transparency is admirable. However, Sydney does not appear to have embraced open data with the same zeal. Extensive detail on city plans, project progress, environmental impact, finances and a host of other government activity are released in annual reports. Indeed, discounting the format, Sydney is a model of procurement disclosure: Disclosure of contract forms are generally quite comprehensive, and Sydney is the only large city in Australia that posts the names of bidders online.

While Sydney appears to benefit from a fairly rigorous set of internal tendering procedures and a professionalized tendering staff, procurement transparency is significantly limited by the format of disclosure. Currently, malfeasance is identified by whistleblowers with inside knowledge, with little public involvement in identifying suspect procurement practices. We believe that the release of bulk data will enable greater public oversight of government contracting and help ensure probity over the process. Unfortunately, our conversations with people familiar with the city’s attitude toward releasing data in more accessible formats revealed a troubling, but sadly common, skepticism.

Our pilot scraping project revealed the difficulty of using the city’s procurement disclosures for meaningful systemic analysis. In Slovakia, it took a well-resourced CSO considerable time and money to surmount similar barriers to use — and only once they had created a procurement data/visualization portal did the public begin to engage with the data. As long as Sydney’s public procurement information remains locked in PDFs, we do not expect to see significant growth in public use of or attention to this data.